Fat City Lofts, the controversial apartment complex proposed opposite Solar Turbines' downtown industrial site, may come back to life as two hotels, redevelopment directors were told Wednesday.

Brad Richter, assistant vice president for planning with the Centre City Development Corp., told the CCDC board that the developer, GLJ Partners, plans to submit a new application by April 11 with action by the board April 25.

The 232-unit lofts project at Pacific Highway and Hawthorn Street was turned down by CCDC Chairman Kim Kilkenny on the grounds that it conflicted with Solar's industrial uses. The developer appealed to the city Planning Commission and is asking for a 60-day delay from the April 26 scheduled commission hearing date to submit a hotel proposal instead.

"We think it's the right thing to do and the path of least resistance," said Jonathan Segal, the lofts architect and a partner with GLJ in the deal. "Hotels are viable at the moment and so we will seize the opportunity. It's the law of odds."

He was referring to plans to expand the San Diego Convention Center by 2016 that is expected to generate more downtown visitors and increase demand for hotels.

However, Segal said GLJ will keep the lofts plan alive in case Solar and other opponents to the apartments do not support the new hotel plan.

"If Solar is a good neighbor and honest participant, as they said they would be, and support us, then we will move forward," he said. "If not, we will actively pursue our rights for the appeal, no question."

He said Solar has not been told of the new plans. A company spokesman was not immediately available.

Segal said a Los Angeles architect is designing a standard hotel and all-suites hotel with a combined 377 rooms. The plan calls for retaining and restoring portions of the present Fat City restaurant building. That building, opened at Top's nightclub in 1941, was bought by the Tom Fat family in the 1970s and after he died in 2007, his family decided to redevelop the property.

The estimated construction cost is up to $40 million, Segal said, but GLJ is losing much of its investment to date, since its lofts plans have to be scrapped.

Solar expressed concern that a residential project several hundred feet from its property, leased from the port district, might invite tougher air pollution control rules and perhaps lead to the facility being forced to relocate.

GLJ and its supporters argued the project complies with city planning guidelines for the site and that denying the development would set a bad precedent that could harm other housing proposals in the area.

Under state air pollution control rules, a hotel does not pose the same environmental threats as a full-time residential use.